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Regulatory group to collect lender-placed insurance data in annual statement

State insurance regulators approved a data call for the lender-placed insurance market at a meeting in Philadelphia last week — a move that comes at a critical juncture for oversight of the product.

Beginning Jan. 1, 2018, companies licensed and reporting at least $50,000 of lender-placed auto or of lender-placed homeowners gross premium within any of the participating jurisdictions will be required to submit data that will be part of insurers' market conduct annual statement.

About 15 insurers will have to submit their data, according to Stephen Robertson, Indiana insurance commissioner and head of the National Association of Insurance Commissioners' Market Regulation and Consumer Affairs Committee. Robertson made the remarks during the NAIC's summer meeting in Philadelphia.

Lender-placed insurance, or LPI, is often known as creditor-placed insurance or force-placed insurance and has come under fire following claims that Wells Fargo & Co. and National General Insurance improperly charged customers for auto insurance.

Consumer advocates believe that one data element to be included in the new collection effort — the average gross placement rate — may help regulators spot potential abuses of LPI insurance, including unnecessary placement. The average gross placement rate is the total number of coverages placed before cancellations, divided by the average number of exposures or number of vehicles or properties covered.

Indiana's Robertson proposed accelerating the date for including this information to 2018 from 2019. California regulators, who have opened up an investigation into the National Guaranty auto policies sales matter, seconded Robertson's motion. California Insurance Commissioner Dave Jones announced Aug. 8 his department will investigate the Wells Fargo-National General matter.